Despite falling PlayStation 5 sales and continued pressure in its consumer electronics division, Sony shares jumped more than 6% in Tokyo on Thursday after the Japanese company raised its full-year profit outlook, following a surging demand in its gaming and music divisions and a reduced hit from US trade tariffs.

Sony now expects operating profit to reach ¥1.33 trillion (A$13.2 billion) for the year ending March 2026 – a 4% increase on previous guidance – while net profit has been revised up to ¥970 billion (A$9.6 billion).

While software engagement on PlayStation consoles is growing, with a 6% rise in monthly active users and gameplay hours year-on-year, Sony continues to face challenges on the hardware front.

In May, the company warned of weakening PlayStation 5 sales, projecting shipments of 15 million units this year, down from 18.5 million last year.

At the time, Sony also flagged a broader slump in its consumer electronics division, with TV and audio sales dropping and fierce competition from rivals like Nintendo and Chinese TV makers eroding market share.

Despite this, subscriber growth on PlayStation Plus outpaced forecasts, while upcoming titles, including Ghost of Yōtei, a sequel to the best-selling Ghost of Tsushima, are expected to boost momentum this year.

Sony’s pivot toward entertainment content is clearly bearing fruit.

The company’s music division posted a 5% revenue increase in the latest quarter, bolstered by streaming royalties and strong anime IPs under Aniplex, including Demon Slayer and Fate/Grand Order. It has also made investments in anime and publishing, including a recent stake in Bandai Namco and Japanese publisher Kadokawa.

Sony’s move to diversify its hardware production and shift toward B2B and content licensing is also seen as a hedge against geopolitical risks.

The company has revised its expected impact from US tariffs to ¥70 billion (A$700 million), down from ¥100 billion (A$1 billion) forecast earlier this year.

Analysts say Sony’s focus on music and content may be key to future growth as the PlayStation 5 approaches the end of its lifecycle.